Selling GBPUSD following yesterday’s BoE meeting

The outcomes of yesterday’s meeting suggest that the Bank of England (BoE) could ease monetary conditions as early as December. This is weighing on the pound, sending the GBPUSD currency pair down. On Thursday, the BoE's Monetary Policy Committee (MPC) voted to keep interest rates at 4%, but this decision was not unanimous. Five officials advocated for maintaining the current level of borrowing costs, while four others insisted on a 25-basis-point cut.

The tone of the accompanying statement was dovish, so monetary conditions may be eased at the next meeting in December. According to the BoE, UK inflation has already peaked despite hitting 3.8% in September. The Consumer Price Index (CPI) is expected to fall due to the regulator’s restrictive policy, sluggish wage growth, and weaker labor market statistics. Future rate decisions will depend on inflation dynamics and the upcoming UK autumn budget.

The potential for a reduction in borrowing costs in December is now putting GBPUSD under pressure. However, the fact that a rate cut has not yet occurred is preventing the pair from a more significant decline.

Meanwhile, recent US labor market data has cooled, strengthening expectations for the Fed to ease policy. This puts the dollar in a tight spot, providing some support for GBPUSD. In the short term, until the BoE meeting in December, the pair is likely to experience moderate volatility with a downward bias. But the upcoming inflation data and budget decisions could alter this outlook.

The overall recommendation is to sell GBPUSD. Profits should be taken at the level of 1.3016. Stop Loss could be placed at 1.3150.

The volume of the open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance does not allow opening a position of this size, it is better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.